Previously we have studies the contribution of histone modifications and their regulatory enzymes to transcriptional regulation in a variety of cellular systems. Our latest efforts have focused on the novel function of DNA methylation in the mammalian genomes. Although the function of DNA methylation in gene promoter regions is well established in transcriptional repression, the function of the evolutionarily conserved widespread distribution of DNA methylation in gene body regions remains incompletely understood. Here, we show that DNA methylation is enriched in included alternatively spliced exons (ASEs) and inhibiting DNA methylation results in aberrant splicing of ASEs. The methyl-CpG binding protein MeCP2 is enriched in included ASEs, particularly those that are also highly DNA methylated, and inhibition of DNA methylation disrupts specific targeting of MeCP2 to exons. Interestingly, ablation of MeCP2 results in increased nucleosome acetylation and aberrant skipping events of ASEs. We further show that inhibition of histone deacetylases leads to a highly significant overlap of exon skipping events caused by knocking-down MeCP2. Together, our data indicate that intragenic DNA methylation operates in exon definition to modulate alternative splicing and can enhance exon recognition via recruitment of the multifunctional protein MeCP2, which thereby maintains local histone hypoacetylation through its established interaction with HDACs.